SHI vs. U PIELKENROOD WATEK LTD.,CHENNAIVS.ITO, TDS WARD-3(1), CHENNAI

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ITA 2912/CHNY/2026Status: DisposedITAT Chennai22 July 2026AY 2015-1612 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeals, finding sufficient cause. It held that the levy of late fees under Section 234E for periods prior to June 1, 2015, is invalid as there was no enabling provision under Section 200A of the Act at that time.

What were the facts?

The assessee filed appeals against orders levying late fees under Section 234E of the Income Tax Act for Assessment Years 2014-15 and 2015-16. There was a delay in filing these appeals before the First Appellate Authority (FAA).

What were the issues?

Whether the levy of late fees under Section 234E is valid for periods prior to June 1, 2015, and whether the delay in filing appeals should be condoned.

Which sections of the Income-tax Act were involved?

Section 234E,Section 200A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: SHRI GEORGE GEORGE K & MS PADMAVATHY S

Hearing: 21.07.2026Pronounced: 22.07.2026

आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: These appeals filed by the assessee are directed against seven orders of the Commissioner of Income Tax (Appeals), National

ITA Nos.2908 to 2914/CHNY/2026 - 2 - Shivsu Pielkenrood Watek Ltd. Faceless Appeal Centre (NFAC), Delhi, all dated 16.02.2026 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The orders of First Appellate Authority (FAA) arise out of the orders of the AO levying late fee u/s.234E of the Act. The relevant Assessment Years are 2014-15 & 2015-16.

2.

There is a delay of 18 days in filing these appeals. The assessee has filed petitions for condonation of delay stating therein the reasons for delay. The reason stated is that the appellate orders had gone unnoticed by the legal representative who was handling the assessee's income-tax matters. It was only during the first week of May, while accessing the assessee's income-tax portal for retrieving certain documents, that the legal representative noticed that the appellate orders had already been passed. The legal representative immediately informed the assessee, whereupon the present appeals were prepared and filed before the Tribunal. On perusal of the same, we find there is sufficient cause for delay in filing these appeals before the Tribunal. Hence, we condone the delay in filing the appeals and proceed to dispose off the appeal on merits.

3.

At the outset, the Ld.AR for the assessee submitted that the FAA had dismissed the appeals of the appeal in limine without

ITA Nos.2908 to 2914/CHNY/2026 - 3 - Shivsu Pielkenrood Watek Ltd. going into the merits, as the delay of more than 8 / 10 years in filing the appeals were not condoned. The FAA held that there is no sufficient cause and dismissed the appeals without condoning the delay. The Ld.AR further submitted that the issues involved in present appeals are squarely covered in favour of the assessee by the order of the Chennai Bench of the Tribunal in the assessee's own case for assessment year 2014-15 in ITA No.1250/CHNY/2026 (order dated 18.05.2026). It was further submitted that the Tribunal had condoned the delay of more than 11 years in filing the appeal before FAA and on merits, also the Tribunal had deleted the late fee u/s.234E of the Act. The Ld. AR contended that since the facts and issues involved in the appeals under consideration are identical to those adjudicated by the Tribunal in the assessee's own case for assessment year 2014-15, the principle of consistency requires that the same view be followed. It was therefore prayed that the levy of late fees u/s.234E of the Act be deleted.

4.

The Ld.DR was duly heard.

5.

We have heard the rival submissions and perused the material available on record. We find that on identical facts, in the

ITA Nos.2908 to 2914/CHNY/2026 - 4 - Shivsu Pielkenrood Watek Ltd. assessee's own case for the assessment year 2014-15, the Tribunal had condoned the delay of 11 years and, on merits, following its decision in the case of Paul System Technologies Pvt. Ltd. (ITA Nos.59 to 67/Chny/2026, order dated 10.04.2026), which in turn followed the judgment of the Hon'ble Madras High Court in the case of True Blue Voice India Pvt. Ltd. vs. CCIT [(2024) 158 taxmann.com 67 (Mad.)], deleted the levy of late fee under section 234E of the Act. The relevant findings of the Tribunal read as follows:- 3. We have heard the parties, and perused the material available on record. The ld AR reiterated the submissions of the assessee made by the assessee before the CIT(A) with respect to condonation. The Ld. AR further submitted that the impugned issue on merits is already covered by various judicial precedence and dismissing the appeal on the ground of technicality is not correct. Before proceeding further, it is imperative to consider the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) where the Apex Court laid down the following six principles which are reproduced hereunder –

(1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late. (2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. (3) ‘Every day’s delay must be explained’ does not mean that a pedantic approach should be made. Why not every hour’s delay, every second’s delay? The doctrine must be applied in a rational, common sense and pragmatic manner. (4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be

ITA Nos.2908 to 2914/CHNY/2026 - 5 - Shivsu Pielkenrood Watek Ltd. preferred, for the other side cannot claim to have vested right in injustice being done because of a nondeliberate delay. (5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

4.

From the above it is clear that when substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of non deliberate delay. We notice that the merits in assessee's case, is covered by judicial precedents, including the decisions of the Hon’ble jurisdictional High Courts and coordinate benches of the Tribunal, that prior to 01.06.2015, there was no enabling provision under section 200A of the Act to levy fees under section 234E while processing TDS statements. Accordingly, as observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalize injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, in our opinion, by preferring the substantial justice, the delay in filing the appeal before the CIT(A) has to be condoned.

5.

On merits we notice that the coordinate bench in an identical situation in the case of Paul System Technologies Private Limited vs ITO (ITA Nos.59 to 67/CHNY/2026 dated 10.04.2026) has held that – 10. We have heard the case, perused the materials on record,and gone through orders of the authorities below.The issues arising in the present bunch of appeals are twofold, viz., (i) whether the delay in filing the appeals before the ld. CIT(A) deserves to be condoned, and (ii) whether the levy of late fees under section 234E of the Act in the facts of the present case is sustainable in law.

At the outset, it is noticed that the ld. CIT(A) has dismissed all the nine appeals in limine on account of inordinate delay ranging from 8 to 10 years, without adjudicating the issue on merits. The assessee has placed on record the reasons for such delay in Form No. 35, stating that the intimations issued under section 200A of the Act were not brought to its notice, as the TDS compliances were handled by an external consultant,

ITA Nos.2908 to 2914/CHNY/2026 - 6 - Shivsu Pielkenrood Watek Ltd. and the management became aware of the impugned demands only upon receipt of recovery notices from the jurisdictional TDS Assessing Officer. Immediately thereafter, the assessee took steps to file the appeals. 11. Considering the explanation furnished, we find that the delay has occurred due to bonafide reasons and circumstances beyond the control of the assessee. It is a settled proposition of law that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. In the present case, the ld. CIT(A) has not examined the explanation for delay in a judicious and liberal manner. Therefore, in the interest of justice, we are inclined to condone the delay in filing all the appeals before the ld. CIT(A).

12.

Having condoned the delay, we now proceed to examine the issue on merits. The undisputed facts are that the late fees under section 234E of the Act have been levied while processing the TDS statements under section 200A of the Act for the relevant assessment years. It is also not in dispute that the TDS returns pertaining to F.Y. 2014-15 and part of F.Y. 2015-16 relate to the period prior to 01.06.2015, i.e., before the amendment enabling levy of fee under section 234E through processing under section 200A came into effect.

13.

It is by now well settled by various judicial precedents, including the decisions of the Hon’ble jurisdictional High Courts and coordinate benches of the Tribunal, that prior to 01.06.2015, there was no enabling provision under section 200A of the Act to levy fees under section 234E while processing TDS statements. Therefore, any such levy for the period prior to 01.06.2015 is not sustainable in law. Our view is supported by the Hon’ble jurisdictional Madras High Court decision M/s.Sri Rujula International vs. PCIT (WP Nos. 4307 of 2024, WMP Nos.4619 & 4621 of 2024) dated 12.09.2024 by following the earlier decisions of the Hon’ble High Court in the case of 2023(10) TMI 1141 [M/s.True Blue Voice India Private Limited vs. Chief CIT, TDS [2024] 158 taxmann.com 67 (Madras) held as under:- “4. In the present case, the respondent had imposed the late fee only under Section 234E of the Act for the assessment years 2012-2013, 2013-2014. However, Section 200A of the Act was not introduced during the said assessment years and it was introduced only with effect from 01.06.2015. Therefore, in the absence of any provisions under Section 200A of the Act, the respondents ought not to have imposed late fee under Section 234E while processing the applications for TDS under Section 200A. Hence, in such view of the

ITA Nos.2908 to 2914/CHNY/2026 - 7 - Shivsu Pielkenrood Watek Ltd. matter, this Court is of the opinion that the impugned Demand Intimation Letters are liable to be set aside.

5.

Accordingly, the impugned demand Intimation Letters dated 28.03.2019 are set aside and the Writ Petition stands disposed of. No costs.”

14.

Further, we note that the issue is already covered by the decision of the coordinate bench of the tribunal in the case of Gopuram Enterprises Private Limited vs. ACIT, ITA No.1002-1007/Chny/2024 dated 26.06.2024 by holding as under:- “4. We have heard ld. Counsel for the assessee and ld.DR. We have perused orders of the authorities below. We find that the issue involved in the present appeals filed by the assessee is on levy of late fee under section 234E of the Act, for belated filing of quarterly TDS returns beyond prescribed date and this issue is squarely covered by the decision of Hon’ble Jurisdictional Madras High Court in the case of M/s.True Blue Voice India Private Limited vs. CCIT & Ors (WP Nos. 2700 & 2703 of 2022) dated 09.10.2023 and held as under:- “10. There is no dispute on the aspect of validity of the Section 234E of the Act. The only issue that has to be decided in the present case is as to whether the late fee can be imposed under Section 234E of the Act, while processing the statement of TDS under Section 200A of the Act for the subject assessment years?

11.

On considering the submissions of both the learned counsel and while reading Section 234E of the Act, it appears that the Department/respondents can impose the late fee for the circumstances mentioned under Section 234E of the Act with effect from 01.07.2012, but not when they process the TDS under Section 200A of the Act. In the Finance Bill, 2015, Section 200A(1)(c) of the Act was introduced, which reads as follows:

“200A. Processing of statements of tax deducted at source.— (1) ...................... (a)...................... (b)........................ (c) the fee, if any, shall be computed in accordance with the provisions of section 234E;”

ITA Nos.2908 to 2914/CHNY/2026 - 8 - Shivsu Pielkenrood Watek Ltd.

12.

Further, the objects and reasons for introduction of Section 200A(1)(c) of the Act are as follows: “Rationalisation of provisions relating to Tax Deduction at Source (TDS) and Tax Collection at Source (TCS)

Under Chapter XVII-B of the Act, a person is required to deduct tax on certain specified payment at the specified rate if the payment exceeds the specified threshold. The person deducting tax (‘the deductor’) is required to file a quarterly Tax Deduction at Source (TDS) statement containing the details of deduction of tax made during the quarter by the prescribed due date. Similarly, under Chapter XVII-BB of the Act, a person is required to collect tax on certain specified receipts at the specified rates. The person collecting tax (‘the collector’) also is required to file a quarterly Tax Collection at Source (TCS) statement containing the details of collection of tax made during the quarter by the prescribed due date. In order to provide effective deterrence against delay in furnishing of TDS/TCS statement, the Finance Act, 2012 inserted section 234E in the Act to provide for levy of fee for late furnishing of TDS/TCS statement. The levy of fee under section 234E of the Act has proved to be an effective tool in improving the compliance in respect of timely submission of TDS/TCS statement by the deductor or collector.

Finance (No.2) Act, 2009 inserted section 200A in the Act which provides for processing of TDS statements for determining the amount payable or refundable to the deductor. However, as section 243E was inserted after the insertion of section 200A in the Act, the existing provisions of section 200A of the Act does not provide for determination of fee payable under section 234E of the Act at the time of processing of TDS statements. It is, therefore, proposed to amend the provisions of section 200A of the Act so as to enable computation of fee payable under section 234E of the Act at the time of processing of TDS statement under section 200A of the Act.

Currently, the provisions of sub-section (3) of section 200 of the Act enable the deductor to furnish TDS correction statement and consequently, section 200A of the Act allows processing of the TDS correction statement. However, currently, there does not exist any provision for allowing a collector to file correction statement in respect of TCS statement which has been furnished. It is, therefore,

ITA Nos.2908 to 2914/CHNY/2026 - 9 - Shivsu Pielkenrood Watek Ltd. proposed to amend the provisions of section 206C of the Act so as to allow the collector to furnish TCS correction statement.

Currently, there does not exist any provision in the Act to enable processing of the TCS statement filed by the collector as available for processing of TDS statement. As the mechanism of TCS statement is similar to TDS statement, it is proposed to insert a provision in the Act for processing of TCS statements on the line of existing provisions for processing of TDS statement contained in section 200A of the Act. The proposed provision shall also incorporate the mechanism for computation of fee payable under section 234E of the Act.”

13.

A reading of the above makes it clear that since no mechanism was available for determination of late fee payable under Section 234E of the Act at the time of processing TDS statements. Thus it was proposed to amend the provisions of Section 200A of the Act, so as to enable the computation of fee payable under Section 234E of the Act at the time of processing of TDS statement under Section 200A of he Act. Thus, the said sub-Section 200A(1)(c) of the Act was came to be inserted with effect from 01.06.2015.

14.

Now the dispute is with regard to the assessment years 2012- 13, 2013-14, 2014-15 and the applicability of Section 200A(1)(c) of the Act for relevant assessment years. There is no dispute on the aspect that the TDS statement was filed under Section 200A of the Act and the respondent had also issued the intimation under Section 200A of the Act, which means the respondents have processed the returns under Section 200A of the Act. When the respondent had started to process the returns of the petitioner under Section 200A of the Act, obviously they have to follow the requirements under Section 200A of the Act. Section 200A(1)(c) of the Act was introduced with effect from 01.06.2015. A reading of the objects and reasons of the same makes it clear that since no mechanism was available, Section 200A(1)(c) of the Act was introduced for imposing late fee for the delay in filing statement of TDS. Therefore, from the introduction of the said Sub-Section it is clear that prior to the same, though Section 234E of the Act was introduced with effect from 01.07.2012, the Authorities were not empowered to impose the late fee while processing the statement of TDS under Section 200A of the Act.

ITA Nos.2908 to 2914/CHNY/2026 - 10 - Shivsu Pielkenrood Watek Ltd. 15. The learned counsel for the respondent advanced his arguments on the aspect of the imposition of late fee by applying Section 200A(1)(c) of the Act retrospectively. This Court is not in agreement with the said submissions of the respondent. Since, there was no provision for imposing the late fee under Section 234E of the Act while filing and processing the TDS returns under Section 200A of the Act, clause (c) to Sub-Section (1) to Section 200A was introduced with effect from 01.07.2012. Therefore, the aforesaid submission made by the learned counsel for the respondent is rejected by this Court.

16.

Further it was stated by the respondent that they have no power to waive the late fee and only the Commissioner of Income Tax is empowered to pass the revised order by proper application of provision of Section 264C of the Act.

17.

In view of the above, it is made clear that the respondent had had imposed the late fee only under Section 234E of the Act for the assessment years 2012-2013, 2013-2014, 2015-2015. However, Section 200A(1)(c) of the Act was not introduced during the said assessment years. In the absence of any provisions under Section 200A of the Act, when they have processed the application for TDS under Section 200A, no late fee can be imposed under Section 234E. Hence, in such view of the matter, this Court feels that the impugned orders are liable to be set aside’’

The Co-ordinate Bench of the Tribunal also in the case of M/s.M.F.Textiles Pvt.Ltd. Vs. ACIT in ITA Nos. 578 & 579/Chny/2021 dated 24.02.2022 had considered an identical issue in light of provisions of section 234E of the Act and also amendment to section 200A by Finance Act, 2015 w.e.f. 01.06.2015 and held that in absence of enabling provision under section 200A of the Act, the Assessing Officer cannot levy late fee under section 234E of the Act for belated filing of quarterly TDS return for period prior to 01.06.2015.

6.

In the present appeals, on perusal of the facts, we find that the assessment years involved are prior to 01.06.2015. Therefore, we are of the considered view that the late fee charged by the Assessing Officer under section 234E of the Act, while processing quarterly TDS return under section 200A of the Act, is without any authority and invalid. Hence, by respectfully following the decisions of the Hon'ble

ITA Nos.2908 to 2914/CHNY/2026 - 11 - Shivsu Pielkenrood Watek Ltd. Jurisdictional Madras High Court in the case of M/s. True Blue Voice India Private Limited (supra) and Co-ordinate Bench in the case of M/s.M.F.Textiles Pvt.Ltd (supra), we are of the considered view that the Assessing Officer cannot levy late fee while processing of TDS return under section 200A of the Act upto the financial year 2014-15. Since, late fee charged in the present case pertaining to the financial years 2012- 2013 and 2013-14, we direct the Assessing Officer to delete the late fee charged under section 234E of the Act in the intimation issued under section 200A of the Act for the processing of quarterly TDS return filed by the assessee.

7.

In the result, all six these appeals filed by the assessee are allowed.

15.

Respectfully following the binding judicial precedents relied upon by the ld.AR, we hold that the levy of late fees u/s.234E of the Act in respect of TDS statements pertaining to the period prior to 01.06.2015 is invalid and liable to be deleted. Accordingly, the eight (8) appeals for A.Ys. 2014- 15 and 2015-16 and corresponding demands raised u/s.234E of the Act as detailed beloware hereby deleted.

6.

It can be seen that the quarterly returns under dispute in the present appeals pertain to period prior to 01.06.2015 and therefore respectfully following the judicial precedence, we hold that the levy of late fees u/s.234E of the Act in respect of TDS statements pertaining to the period prior to 01.06.2015 is invalid and liable to be deleted.”

6.

Since the facts and circumstances of the years under consideration are admittedly identical to those considered by the Tribunal in the assessee's own case for Assessment Year 2014-15 in ITA No.1250/CHNY/2026, respectfully following the aforesaid decision, we condone the delay in filing the appeals before FAA and hold that levy of late fees u/s.234E of the Act in respect of TDS statements pertaining to the period prior to 01.06.2015 is invalid

ITA Nos.2908 to 2914/CHNY/2026 - 12 - Shivsu Pielkenrood Watek Ltd. and liable to be deleted. Accordingly, we direct the AO to delete the levy of late fee u/s.234E of the Act. It is ordered accordingly.

10.

In the result, the appeals filed by the assessee are allowed.

Order pronounced in the open court on 22nd July,2026 at Chennai.

Sd/- Sd/- (प�मावती एस) (जॉज� जॉज� के) (PADMAVATHY S) (GEORGE GEORGE K) लेखा सद�य/ACCOUNTANT MEMBER उपा�य� /VICE PRESIDENT चे�नई/Chennai, �दनांक/Dated, the 22nd July, 2026 RSR, Sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त /CIT, Coimbatore 4. �वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF. By Order Digitally signed by REKHA REKHA SENTHIL RAJ SENTHIL RAJ Date: 2026.07.24 17:02:35 +05'30'

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